Mulvihill spins out money manager Ridgewood Capital
Andrew Willis, September 3, 2008

A new money manager was born Tuesday, as Mulvihill Capital Management spun out its wealth management division to employees, who renamed the firm Ridgewood Capital Asset Management.

The amicable split, five months in the making, sees founder John Mulvihill retain a structured product firm that's home to 15 flavours of retail-focused funds.

Ridgewood opens its doors with $1.2-billion of assets from clients who include wealthy individuals, first nations groups and foundations. The 15-employee company is controlled by mutual fund executive John Simpson, who spent the past 13 years building this arm of Mulvihill Capital, along with portfolio manager Paul Meyer.

“We see a niche for a wealth management firm that offers high-end client service and consistent performance, and we see recent consolidation in the industry offering Ridgewood an opportunity to expand in this niche,” said Mr. Simpson on Wednesday. Ridgewood is being launched as employee-owned money managers such as Phillips Hager & North and Addenda Capital are being bought by large financial institutions.

Helming a fund manager in choppy markets is nothing new to Mr. Simpson. He took the wheel at the Canadian arm of Fidelity Investments in Oct. 1987, weeks ahead of the market crash. On Mr. Simpson's watch, Fidelity went from an also-ran to No. 6 among domestic fund managers when he left in 1995. Fidelity still holds that No. 6 position in the industry.

Ridgewood, the name of the street where Mr. Simpson grew up in Sarnia, Ont., builds custom designed portfolios for most of its clients. But these clients also occasionally make use of in-house funds, so as part of the spin-out, Ridgewood will become primary advisor on four Mulvihill mutual funds.

Mulvihill Capital will hold a minority stake in Ridgewood, continuing a relationship that dates back to 1985, when Mr. Simpson and Mr. Mulvihill were colleagues at the investment counselling arm of Canada Trust. Mr. Mulvihill bought that unit from Canada Trust in 1995 and renamed it.